bearish
Testing Times Loom for US Treasury Market Functionality with Potential Global Consequences
383 Views02 Oct 2023 05:44
SUMMARY
- The significant incursion into the US Treasury market by the Fed has imparted legacy issues that potentially undermine its functionality. Primary dealers' capacity to undertake market-making has been impaired.
- Hedge funds are playing a larger role in the distribution and provision of price information of Treasuries to other investors via the use of leverage in the repo market.
- Significant dysfunctionality in the US Treasury market has adverse implications for global liquidity due to its influence on riskier segments of the capital structure, notably corporate bonds and equities.
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- Testing Times Loom for US Treasury Market Functionality with Potential Global Consequences02 Oct 2023
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